Time to Make Some Dough: HenDough Launches Its Franchise Opportunity After Seeing a Consistent 10% Increase in Year-Over-Year Revenue

HenDough, the chicken and donut restaurant brand founded in Hendersonville, North Carolina, offers a superior made-from-scratch menu paired with delicious comfort food. Over the past five years, the HenDough concept has exploded in popularity, resulting in a consistent 10% increase in year-over-year revenue as local consumers are drawn in by the chef-driven menu, vibrant and energetic atmosphere, first-class hospitality and family-friendly environment.

Now, after opening a second location and seeing the replicable success of the concept, HenDough founders Paul and Sarah Klaassen are officially launching the HenDough franchise opportunity, giving qualified entrepreneurs the chance to disrupt their local food scene and position themselves for strong profits and high growth potential.

How HenDough Started from Scratch

Paul started in the restaurant industry as a teenager, working his way up from dishwasher to cook at an Italian restaurant. “After attending culinary school, I started working at several high-end restaurants and eventually ran a hotel in the Virgin Islands,” said Paul. “I came back and started working at the Biltmore Estate in Asheville, North Carolina as a chef.”

That is where Paul met Sarah, who also had over a decade of restaurant experience and was working as a pastry chef at the Biltmore. The two eventually married, and when the time came to purchase a home and start a family, Paul and Sarah settled in Hendersonville. After the birth of their son Hayden a few years later, the couple began looking for a career that would offer a more flexible lifestyle and allow them to spend more time with the family.

The couple decided to leave the corporate hospitality world and open their own business. Having worked in upscale establishments for much of their careers, Sarah and Paul wanted their first restaurant project to be approachable and allow them to get involved in the community. The customers at the Biltmore were mainly tourists, which meant Sarah and Paul weren't able to build long-lasting customer relationships. With their new project, they wanted to help local organizations and see the same faces everyday.

“We wanted to take a break from the fine-dining space and found a unique restaurant space in Hendersonville perfect for a fun, casual dining concept,” said Sarah. “In 2016, we came up with the idea of opening a donut shop that also offered fried chicken as a way to combine Paul’s cooking expertise with my background as a pastry chef.”

Three months later, the first HenDough — which is both a play on the company’s two main product categories and locals’ nickname for Hendersonville — opened to massive and unexpected success in March of 2016.

“Chicken and donuts are a unique combination, so we weren’t sure if the concept was going to work,” Paul said. “As we geared up for opening and spread the word, we really started to feel the momentum build in the area. The first day we opened, we were out of food by 1:00 p.m. We even ended up cutting out dinner and focusing solely on lunch and breakfast because we couldn’t keep up with the demand. The first year we opened, we exceeded our expectations in revenue by 50%, making $450,000 in revenue instead of our projected $300,000.”

Why the HenDough Concept Continued to Grow

As HenDough proved to be a huge hit in Hendersonville, the Klaassens decided to double down and open a second location in a food hall in Greenville, South Carolina. The Klaassens moved to the Greenville area as a way to be closer to the new restaurant. Paul says the experience ended up becoming a trial run in whether or not the HenDough concept could succeed without requiring a daily presence.

“We’ve had the most time off together since starting our own company,” said Sarah. “We realized we could step back and the restaurant would continue to run smoothly — our team allows us to focus on growth while the managers take care of the day-to-day operations.”

Since opening, Paul says the HenDough restaurants have been growing revenue at about 10% year-over-year. In 2017, the brand won the Henderson County Chamber of Commerce’s Business Plan Contest, which highlights businesses who have found the path to success.

How HenDough Adapted to the Pandemic With a Revamped Restaurant Design, Robust Off-Premise Offering and Expanded Menu

When the COVID-19 pandemic hit, Paul says they were able to successfully pivot and saw a booming demand for take-out business. Right now, all of the Greenville location’s service is strictly takeout and Hendersonville is operating at around 75% take-out service.

“The first HenDough restaurant is located in an old converted house, and we took the downtime of the pandemic to remodel,” said Sarah. “We had a chimney removed through two levels, opened up the inside of the building to promote social distancing, converted a side window into a take-out window and grew our outdoor seating 70%.”

After remodeling in January 2021, the Klaassens reopened the Hendersonville dining room at about 70% capacity, introduced dinner and even added burgers to the menu. Despite the pandemic, the Hendersonville restaurant had its best sales year yet in 2020, and with the addition of dinner and burgers, Paul and Sarah expect to see a 25% to 30% growth in revenue in 2021.

“As we emerge from the pandemic, we predict we will be back at 80% to 90% on-premise business soon,” said Sarah. “Most of the guests come in and order a donut at the counter after seeing our display case. After trying one, they will usually order a box of donuts to take with them when they go, so on-premise is our preferred service.”

HenDough Offers Prospective Franchisees a Wide-Open Market, Local Vendor Partnerships and Real Estate Support

Although they knew HenDough was ready to grow, Paul and Sarah soon realized they couldn’t continue to open new locations themselves. After customers repeatedly came in and asked them about franchising, the Klaassens decided to start putting together an FDD in late 2019 but had to halt the process during COVID-19. Now, after seeing the resilience of the business model over the past year, they have decided to move forward and open up the HenDough brand to franchising.

In addition to the proven business model, Paul notes the unique concept means prospective franchisees don’t have to worry about competition in the sector. “There are fried chicken restaurants everywhere and donut shops everywhere, but there are very few places that do both as well as we do,” he said. “Customers can treat HenDough like a donut shop in the morning, and can then come back and enjoy a totally different meal for lunch and dinner.”

To source products, HenDough partners with local vendors, businesses, breweries and dairy farms, including Dynamite Roasting Co.; Underground Baking Co.; Southern Appalachian Brewery; Mills River Creamery; and Naked Apple Hard Ciders. While the brand is still trying to decide if they will expand those partnerships for franchisees or will help them find vendors in their own area, this model offers a unique opportunity for entrepreneurs looking to support their local business community.

When it comes to real estate, HenDough doesn’t have to conform to normal standards. The restaurant has succeeded in a 100-year-old house and a food hall, so the team has the experience needed to help franchisees thrive in unique and nontraditional sites. With a relatively small average footprint of 2,500-3,500 square feet, Paul says they are looking to keep real estate affordable but also retain the personality of the brand. In the long term, Paul says they hope to lease out real estate in a similar model to McDonald’s.

In terms of training, the Klaassens hope to open another location in the Greenville area and use it as a flagship store where the first few franchisees can come to check out the concept, attend Discovery Day and go through a comprehensive, hands-on training program.

HenDough Looks to the Carolinas and Beyond for Future Growth

In the next five to 10 years, Paul says they hope to open one or two new corporate stores, as well as double their footprint every year through franchising. To start, they have identified a few markets in the Carolinas primed for growth and predict the area could have room for eight to 10 stores. Prospective franchisees can also take advantage of the brand’s established reputation in the region, as HenDough has been mentioned in local publications such as Citizen Times, Southern Living and Atlanta Magazine.

Other target markets include Florida, Georgia and Tennessee due to the reasonable proximity to the established locations.

“The ideal HenDough franchisee is someone who is heavily involved in their community and able to go with the flow and be flexible,” said Sarah. “For the first few locations, franchises should have some experience in the restaurant industry and be willing to be part of the day-to-day operations. We are looking for single-unit operators to start who will hopefully be able to evolve into multi-unit owners moving forward.”

Now, enthusiastic, qualified franchisees have the chance to pursue an incredible and innovative opportunity in the casual dining industry, utilizing HenDough’s proven systems to drive profits and establish themselves as a beloved restaurant in their community.

The total initial investment required to open a HenDough restaurant is $205,500-$643,500 (multi-developmental initial investment $235-500-$778,500). The initial franchise fee is $30,000 for one establishment and $15,000 for each additional restaurant. For more information, visit: https://hendough.com/franchise/